FTC Red Flag Rules Enforcement Delayed Until June 1, 2010

The Federal Trade Commission (“FTC”) has again extended enforcement of the Red Flag Rules, now until June 1, 2010.

The latest delay comes at the request of Congress, which is considering a bill that amends the identity theft rule by eliminating entities with fewer than 20 employees from complying.  The House of Representatives passed that bill in late October 2009. The bill is now in the hands of the Senate.

The Red Flag Rules impact financial institutions and creditors subject to FTC jurisdiction. According to the Rules, created under the Fair and Accurate Credit Transactions Act, creditors of covered accounts must establish a program to detect, prevent and mitigate identity theft.

Originally, the Red Flag Rules would have taken effect on November 1, 2008, which was then extended to May 1, 2009, and then further extended to November 1, 2009.

For more information on the Red Flag Rules, visit: http://pvwlaw.wordpress.com/category/red-flag-rules/.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

CMS ADOPTS PAYMENT POLICY & RATE CHANGES FOR SERVICES IN HOSPITAL OUTPATIENT DEPARTMENTS AND AMBULATORY SURGICAL CENTERS FOR 2010

The Centers for Medicare & Medicaid Services (“CMS”) has announced that most hospitals will receive an inflation update of 2.1 percent in their payment rates for services provided to Medicare beneficiaries in outpatient departments.  Due to a Medicare requirement, CMS will reduce the update by 2.0 percentage points for hospitals that did not participate in quality data reporting for outpatient services or that did not report the quality data successfully, resulting in only a 0.1 percent update for those hospitals. 

CMS also announced that ambulatory surgical centers (“ASCs”) will receive a 1.2 percent inflation update starting January 1, 2010.  CMS projects that the aggregate Medicare payments to more than 4,000 hospitals and community mental health centers in calendar year (“CY”) 2010 will be approximately $32.2 billion, while aggregate Medicare payments to approximately 5,000 ASCs will total $3.4 billion.

The payment updates are included in a final rule with comment period that revises payment policies and updates the payment rates for services provided to beneficiaries during CY 2010 in hospital outpatient departments under the Outpatient Prospective Payment System (“OPPS”) and in ASCs under a revised rate-setting methodology that was established January 1, 2008.

The updated payment rates are meant to ensure that Medicare beneficiaries continue to receive high quality and efficient care in the most appropriate setting.

The CY 2010 OPPS/ASC final rule with comment period will be included in the November 20, 2009 Federal Register.  Comments on designated provisions are due by 5:00 p.m. EST on December 29, 2009.  CMS will respond to comments in the CY 2011 OPPS/ASC final rule.

© 2009 Parsonage Vandenack Williams LLC

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REMINDER: NOVEMBER 15, 2009 DEADLINE FOR MEDICARE PART D CREDITABLE COVERAGE NOTICES

Employers with group health plans need to provide Medicare Part D notices of creditable or non-creditable coverage to Medicare-eligible individuals by November 15, 2009.  Employers can satisfy this requirement by including the notice in enrollment materials or in separate mailing during the fall. When preparing materials for distribution this fall, employers should be aware of revised model notices provided by the Centers for Medicare & Medicaid Services (“CMS)”.

Background

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires group health plans that provide prescription drug coverage to disclose to individuals eligible for Medicare Part D whether their coverage is “creditable.”  Basically, prescription drug coverage is considered “creditable” if it is at least actuarially equivalent to (i.e., at least as good as) the Medicare Part D coverage. This disclosure is very important because individuals who do not enroll in Medicare Part D when first eligible and who have gone more than 63 days without creditable coverage generally will have to pay higher premiums permanently when they finally enroll. Thus, individuals need to know the status of their group health plan coverage in order to make an informed decision about enrolling in Part D.

Notices regarding whether prescription drug coverage is creditable or non-creditable must be provided –

• prior to the start of the annual Part D enrollment period (November 15 through December 31 of each year);
• prior to an individual’s initial enrollment period for Part D;
• prior to the effective date of coverage for a Part D-eligible individual who joins an employer plan;
• when an employer’s prescription drug coverage ends or changes status as creditable coverage; and
• upon a beneficiary’s request.

The deadline for providing annual creditable coverage notices this year is November 15.

Revised Notices Posted

Earlier this year, CMS posted revised model notices and updated guidance regarding creditable coverage disclosures. The changes to the model notices and guidance are minimal.  CMS recommends, but does not require, that personalized notices be provided upon request to enable individuals to show proof of prior creditable coverage when enrolling in a Part D plan.

What Information is Required in the Creditable Coverage Notification?

The information must explain whether the plan sponsor’s prescription drug coverage is creditable. If the coverage is not creditable, this information must also explain that there are limitations on the periods during the year in which the individual may enroll in a Medicare drug plan and that the individual may be subject to a late enrollment penalty.

What Should Employers Do to Comply with the CMS Rules?

It is important for employers to review their current notices and determine whether any changes or updates need to be made so that they are in compliance with the CMS requirements.  If you have any questions in regard to determining whether your group health plan is creditable or non-credible, or in regard to the notice process in general, you should consult your attorney.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

Stricter Self-Referral Rules Under Stark May Bring an End to Some Physician-Hospital Contracts

Major changes to the federal anti-self-referral rules known as the Stark law take effect October 1, 2009.  These changes were approved over a year ago, and could potentially cause many physician-hospital arrangements to fall out of compliance if doctors are not prepared. Lack of knowledge of the Stark law revisions or the structure of a particular agreement will not excuse physicians from liability.

The changes to the Stark law make it much more difficult for physicians and other entities providing designated health services to enter into joint ventures around hospital services. Stark is a strict-liability statute, so even if physicians have innocent intentions, they are still subject to penalties for violating the statute.

The Stark law generally prohibits physicians from referring patients to entities in which they have a financial stake, although there are several exceptions to the rule. In August 2008, the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule making broad revisions to the Medicare hospital inpatient prospective payment system that will restrict:

• So-called “under arrangements,” where hospitals contract with physician-owned entities to provide a broad range of ancillary services, such as clinical labs or imaging services.
• Per-use or “per-click” payments for equipment and space leases.
• Compensation deals based on a percentage of revenue generated by space or equipment use.

The changes were delayed one year from the original October 1, 2008, implementation date.

In order to comply with the changes to the Stark law, physicians will need to restructure contracts to narrow the scope of services they perform for a hospital.  For example, a physician-owned entity may need to limit its clinical services but still could conduct billing and management activities.

How Should Physicians Prepare for the Stark Changes?

Here are some steps physicians can take to ensure compliance with the rules taking effect October 1, 2009:

• Consult an attorney to determine whether current hospital joint ventures or space and equipment leases will continue to be compliant with Stark.
• Review contracts for clauses that allow parties to amend or dissolve agreements as a result of changes in the law. Be sure to include such clauses in future contracts.
• Consider restructuring existing deals to limit the scope of services provided or to take advantage of other applicable safe harbors. In some instances, physicians may be forced to unwind the arrangements.
• Make sure any changes to compensation reflect fair market value.
• Review any state self-referral laws.
• Make any changes to agreements in writing.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

Should Physicians Use Patient No-Complaint Contracts?

Due to the presence of the Internet, patients unpleased with a visit to their physician now have the ability to go online with complaints and posting — often anonymously — critiques of physicians, in much the same way travelers rate hotels on such Web sites as TripAdvisor.

In the past five years more than 40 Web sites, such as RateMDs.com, Angie’s List, Yelp, DrScore and Vitals.com (motto: “where doctors are examined”), have begun reviewing physicians, providing information about one of the more difficult and important decisions consumers make routinely. As the number of these sites grows, questions about their usefulness, accuracy and fairness are also increasing. In some cases the anonymity of the Internet has collided with the rights of physicians who are constrained by laws that protect patient privacy.

As a defensive measure, some physicians are requiring patients to sign broad agreements that prohibit online postings or commentary in any media outlet “without prior written consent.” Although critics call the documents gag orders, claiming they are both unethical and unenforceable, many doctors view them as an appropriate response to websites that not only ask detailed questions about a doctor’s punctuality, availability, communication skills, office staff and the effectiveness of treatment, but also permit comments that may be untrue.

First Amendment Free Speech Implications

The First Amendment of the United States Constitution protects the right to freedom of religion and freedom of expression from government interference.  Freedom of expression consists of the rights to freedom of speech, press, assembly and to petition the government for a redress of grievances, and the implied rights of association and belief. The Supreme Court interprets the extent of the protection afforded to these rights. The First Amendment has been interpreted by the Court as applying to the entire federal government even though it is only expressly applicable to Congress. Additionally, the Court has interpreted the due process clause of the Fourteenth Amendment as protecting the rights in the First Amendment from interference by state governments.

It clear that the First Amendment freedom of speech only applies to the government, and not to private individuals.  Thus, physicians have the right to enter into private contracts with their patients to prevent patients from online postings or commentary in any media without prior written consent.

Benefits of No Complaint Contracts

No complaint contracts help physicians to safeguard their reputations in the era of the internet. Physicians are bound by privacy laws, making it extremely difficult to defend themselves against bogus online allegations. Requiring patients to sign a no complaint contract does not mean a physician is opposed to free speech, it is simply taking preventative action to guard against potential extremely damaging, false speech.

Physicians should consider whether the use of a patient no complaint contract would benefit their particular practice.  For more information on this issue, feel free to contact the health care law attorneys at PVW Law.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

CMS Proposes Medicare Payment Increase for ASCs in 2010

CMS recently issued a notice of proposed rulemaking that includes proposals for policy changes and payment rates for services in ambulatory surgical centers (“ASCs”), which would continue the expansion of surgical procedures that Medicare would cover for services performed in ASCs. The proposed rule seeks to make sure that beneficiaries have access to outpatient services in all appropriate settings, while improving the quality and efficiency of service delivery.

Since January 1, 2008, ASCs have been paid under a revised payment system that aligns ASC payment rates with the rates paid for similar services when provided in hospital outpatient departments. The revised system also increases the number and types of surgical services that are covered by Medicare when performed in ASCs.  Calendar year 2010 is the third year of a four-year phase-in of the ASC payment rates calculated under the standard rate-setting methodology and the first year in which CMS is authorized to apply an update to the conversion factor.  CMS is projecting the percentage increase in the Consumer Price Index for All Urban Consumers that would update the ASC conversion factor to be 0.6 percent. Total 2010 payments to ASCs are estimated to be $3.4 billion.

CMS will accept comments on the proposed rule until August 31, 2009, and will respond to comments in a final rule to be issued by November 1, 2009.

To review the proposed rule and for instructions about how to submit comments, go to: http://edocket.access.gpo.gov/2009/E9-15882.htm

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

MGMA Releases Proposed 2010 Medicare Physician Fee Schedule Analysis –

The Centers for Medicare & Medicaid Services (“CMS”) recently released the 2010 Medicare proposed physician fee schedule along with a related press release and fact sheet. The regulation includes provisions that confirm a 21.5 percent reduction in 2010 Medicare physician payments unless Congress enacts legislation to reverse this cut.  The regulation also proposes to “remove physician-administered drugs from the definition of “physician services” for purposes of computing the physician update formula in anticipation of enactment of legislation to provide fundamental reforms to Medicare physician payments,” a move that has been advocated by the Medical Group Management Association (“MGMA”) for a long time.

MGMA analyzed the regulation’s impact on medical group practices and is making its analysis available only to members at mgma.com. The proposed fee schedule includes provisions that would affect physician practices as follows:

• Start implementation of the congressionally-mandated requirement that suppliers of advanced diagnostic imaging services become accredited
• Notably change the practice expense relative value units for many covered services
• Increase the equipment usage assumption for equipment costing greater than $1 million
• Transfer responsibility from the patient to the Medicare program for co-payments for covered outpatient mental health services
• Add a group practice reporting option to both the Physician Quality Reporting Initiative and the E-Prescribing Incentive Program

 The member-only analysis can be accessed here: http://www.mgma.com/policy/default.aspx?id=5802.

© 2009 Parsonage Vandenack Williams LLC

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AMA ANNOUNCES ENHANCED ELECTRONIC PRESCRIBING LEARNING CENTER

Earlier this year, the American Medical Association (“AMA”) established a new online learning center to provide physicians with the information and tools that they need to make well-informed decisions about electronic prescribing (“ePrescribing”).  Now, the AMA has introduced additional enhanced tools for ePrescribing. 

The learning center offers many tools and resources to help physicians, including calculators to estimate time savings and eligibility for incentive payments as well as planning devices to help assess practice readiness for and ease implementation of new technologies.  Examples of some of the new tools include:

• A system finder tool that picks three systems for a user based on the user’s response to a brief survey
• Side-by-side comparisons of up to three sPrescribing vendors at one time
• The ability to view vendor feedback and ratings from other users, and the ability to provide one’s own feedback
• Automated capability to contact a vendor when a decision is reached

The site and its resources can be accessed by physicians and others at http://www.ama-assn.org/ama/pub/eprescribing/home.shtml.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

RECOVERY AUDIT CONTRACTORS TO OPERATE NATIONWIDE

The Centers for Medicare & Medicaid Services (“CMS”) recently confirmed that the Recovery Audit Contractors (“RACs”) will operate in all 50 states by the end of 2009.  RACs identify overpayments and underpayments by CMS to Medicare providers.

The permanent RAC program began with a three-year RAC demonstration project established under the Medicare Modernization Act of 2003. The Tax Relief and Health Care Act of 2006 made the RAC program permanent and authorized CMS to expand it to all 50 states by 2010.

Unlike the demonstration project, the permanent RAC program limits the medical-record review period to three years and prohibits audits on claims paid before October 1, 2007. The program also requires RACs to have a physician medical director and certified coders available to discuss denials with providers.  

 Here are some practical steps that providers should take to ensure that submitted claims meet the Medicare rules:

• Identify where improper payments have been persistent by reviewing the RACs’ Web-sites and identifying any patterns of denied claims within their own practice or facility.
• Implement procedures to promptly respond to RAC requests for medical records.
• If the provider disagrees with the RAC determination, file an appeal before the 120-day deadline.
• Keep track of denied claims and correct these previous errors.
• Determine what corrective actions need to be taken to ensure compliance with Medicare’s requirements and to avoid submitting incorrect claims in the future.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

Bill Seeks to Strengthen the False Claims Act

The federal False Claims Act permits a person with knowledge of fraud against the United States Government, referred to as the “qui tam plaintiff,” to file a lawsuit on behalf of the Government against the person or business that committed the fraud.  For example, an employee that learns from a colleague of fraud by his or her employer at work may bring a qui tam action against the employer.  If the action is successful,  the qui tam plaintiff is rewarded with a percentage of the recovery.

The House and Senate have approved a final version of the Fraud Enforcement and Recovery Act, which includes provisions to strengthen the False Claims Act.  President Obama is expected to sign the measure.

The changes to the False Claims Act are due to a perception among some lawmakers that recent federal court decisions may have restrained the law from achieving its intended goals.  False claims lawsuits often target hospitals, physicians and pharmaceutical companies because their businesses receive massive sums of federal dollars.

Under the new legislation, the attorney general would be required to submit an annual report to Congress about settlements made under the FCA.  This would help to assess whether the Department of Justice is using the act as it is intended and ensure that qui tam plaintiffs are protected in bringing an action.

 

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com